Web Hosting Roundtable - Industry Trends 2005: Guy Yalif, David Chao,Thomas Vollrath, Ivan Vachovsky, Lance Crosby, Curtis Curtis, Jeremy Sabil, Bevan Erickson, Kurt Daniel, Jay Adelson, Manny Medina; Bob Leffler

1. Please can you tell us some words about you and your position in the company?
2. Where do you see the Industry growth in this starting year? What are the trends you are expecting to see growing in the next 12 months?
3. Discuss your vision for this year in regard to security. Do you see more challenges in this aspect for the Web Hosting Industry?
4. Where do you see the challenges before your company and how do you see overcoming the obstacles going along with the growth?
5. What will be the major acquisition you can predict for this year?
6. If you can summarize Industry 2005 in one sentence, what it will be?

5. What will be the major acquisition you can predict for this year?

Guy Yalif:

While I can't speculate on major acquisitions for the upcoming year, I can say that the economics that drive industry consolidation will likely continue given very few providers are experiencing substantial growth.

David Chao:

Ivan Vachovsky:

Prediction is part of my job, however I'd rather predict  trends, markets, products and technology than what move a CEO with extra cash or stock will make. Take a look at my answers to the above questions. There is a lot of M&A between the lines. First as the industry moves towards new type of customers it will need a new type of product. M&A may serve this purpose well providing quick time to market.  Second, increased complexity and need for investments may drive up the size of the critical mass for a web hosting business to survive. Everyone below such critical mass better sell his business now, because it will lose money, become less attractive target in the future and may quietly die on the vine.

Curtis Curtis:

If I knew that, I would probably buy their stock and make millions. Seriously, I think we are going to see a couple of the big players in this industry merge. As to whom, I have some favorites but do not want to speak out of turn.

Bevan Erickson:

I'm not sure that I can predict THE major acquisition for the year.

Kurt Daniel:

I would expect a few large acquisitions by Telcos, ISPs, registrars and/or international hosting providers and likely a few more hosting rollups.

Thomas Vollrath:

Sun might go for Novell.

Jay Adelson:

It is our belief that one of the large North American telecommunication carriers will be acquired in 2005. In addition, the high cost of operation for managed hosting and colocation will drive more players out of the Web hosting market, as we have already seen from companies such as Cable and Wireless and Sprint.

Lance Crosby:

Rackspace will buy/merge with Data Return

Manny Medina:

Due to company policy Terremark cannot make any financial or acquisition projections.

Bob Leffler:

I won't mention any companies by name, but I will say that the e-learning industry as whole will see a movement from point solutions (simply tracking training) to larger, complex blended learning programs that combine tracking training, collaborative technologies, and analysis of training data. The market will undoubtedly see at least a few acquisitions in which leading LMS companies will acquire providers of these point solutions. Some of these publicly traded LMS firms, with which Pathlore competes, may find themselves to be acquisition targets, too.

1. Please can you tell us some words about you and your position in the company?
2. Where do you see the Industry growth in this starting year? What are the trends you are expecting to see growing in the next 12 months?
3. Discuss your vision for this year in regard to security. Do you see more challenges in this aspect for the Web Hosting Industry?
4. Where do you see the challenges before your company and how do you see overcoming the obstacles going along with the growth?
5. What will be the major acquisition you can predict for this year?
6. If you can summarize Industry 2005 in one sentence, what it will be?